Are online sales metrics irrelevant for brick and click retailers?
Dick’s Sporting Goods became the latest retailer to tell Wall Street it will move away from reporting online metrics.
On its fourth-quarter conference call, Lee Belitsky, CFO, said that beginning in the first quarter of 2020, although Dick’s will continue to provide consolidated same-store sales results, it will no longer separately provide e-commerce sales growth and penetration metrics.
“Our athletes [customers] are increasingly shopping across multiple channels and on the same transaction. And to attribute the sale to one channel or the other can be quite arbitrary,” said Mr. Belitsky. “We believe this single view of the consumer best represents our omnichannel approach, which centers around serving our athletes, whenever, wherever and however they want to shop.”
In the fourth quarter, online sales represented 25 percent of revenues, up from 23 percent a year ago.
The change comes as the retailer reported that its approximately 850 stores contributed “tremendously” to e-commerce growth through BOPIS and ship from store. For 2019, BOPIS grew at twice the rate of the 15 percent sales growth seen in the overall e-commerce business.
Dick’s joins other retailers that no longer report online sales separately for similar reasons, although many executives still talk up online progress.
In 2013, Macy’s reportedly became the first major retailer to stop providing online metrics. Their CFO at the time, Karen Hoguet, said the “line between stores and the Internet is blurring so much.” Yet on its 2019 fourth-quarter conference call, Jeff Gennette, CEO, said Macy’s digital business generated $6 billion in revenue in 2019, saw accelerated growth in the fourth quarter and contributes to profitability.
Others who have stopped reporting online and in-store sales separately include J.C. Penney, Kohl’s and Nordstrom. On its fourth-quarter conference calls, Kohl’s officials still indicated digital sales continued to grow at a double-digit pace. Penney’s officials didn’t discuss growth but said online’s margins were improving. Nordstrom didn’t discuss its online performance specifically.
Walmart, Target, Kroger and Home Depot are among the retailers that regularly report online growth, but not penetration. American Eagle, Foot Locker and Williams Sonoma are among those regularly reporting online as a percentage of sales.
- Dick’s Sporting Goods Reports Fourth Quarter and Full Year 2019 Results; Delivers 5.3% Increase in Fourth Quarter Same-Store Sales – Dick’s Sporting Goods
- Dick’s Sporting Goods Inc (NYSE: DKS) Q4 2019 Earnings Call Transcript – Management Updates – Alpha Street
- Macy’s Stops Reporting Online Stats, Blames Too Much Channel Blur – Fierce Retail
- Macy’s Inc (M) Q4 2019 Earnings Call Transcript – The Motley Fool
- Kohl’s Corp (KSS) Q4 2019 Earnings Call Transcript – The Motley Fool
- C. Penney Company, Inc. (JCP) CEO Jill Soltau on Q4 2019 (Earnings Call Transcript) – Seeking Alpha
- Nordstrom Inc (JWN) Q4 2019 Earnings Call Transcript – The Motley Fool
DISCUSSION QUESTIONS: Are online growth and/or penetration metrics becoming irrelevant with increasing omnIchannel behavior by consumers? How has the value of the metric changed?